Will It Be a Sunny Summer for Stocks—or a Dreary Rerun of Past Years?

Whether the S&P 500 can hold above the key 200-day moving average may determine the market's direction.

With stocks ending May with one of the worst monthly performances in two years, the trend no longer is the bulls' steadfast friend. The market now is on track to erase all of the first quarter's record gains, and absent a quick turnaround, could be headed for a rerun of the soggy summers of 2010 and 2011.

Last week, I discussed how the market's small recovery "tested" its previous breakdown (see Getting Technical, "Stocks' Breakdown Confirms the Bear's Return," May 23). A test is simply an upside...